Yesterday’s signals were not triggered as there was no bullish price action at 106.29, and insufficiently bullish price action at 105.86.
Today’s USD/JPY Signals
Risk 0.75%.
Trades must be taken between 8am New York time and 5pm Tokyo time, over the next 24-hour period.
Short Trade
Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 106.37.
Place the stop loss 1 pip above the local swing high.
Adjust the stop loss to break even once the trade is 20 pips in profit.
Take off 50% of the position as profit when the trade is 20 pips in profit and leave the remainder of the position to ride.
Long Trade
Go long following a bearish price action reversal on the H1 time frame immediately upon the next touch of 105.86.
Place the stop loss 1 pip below the local swing low.
Adjust the stop loss to break even once the trade is 20 pips in profit.
Take off 50% of the position as profit when the trade is 20 pips in profit and leave the remainder of the position to ride.
The best method to identify a classic “price action reversal” is for an hourly candle to close, such as a pin bar, a doji, an outside or even just an engulfing candle with a higher close. You can exploit these levels or zones by watching the price action that occurs at the given levels.
USD/JPY Analysis
I wrote yesterday that I did not exactly have a bullish bias, but I thought that over the coming days 106.29 is more likely to hold as support than break down. I was wrong, the level at 106.29 has already broken down, although the support level below that at 105.86 has held so far. I think there is now a change in the technical picture and the outlook has become more bearish, especially below 105.86. Looking at the price chart below, it can be seen that the price is contained within a very wide but certainly bearish price channel. There is also a long-term bearish trend and new lower resistance at the 106.30 area which has been a significant battleground over recent days. I have a bearish bias, which will get much stronger if the price makes a sustained break below 105.86.
There is nothing due today concerning either the JPY or the USD.